Blog Posts

I recently had the opportunity to attend MRC Vegas 2018 for the first time in many years. When I attended Merchant Risk Council meetings in the past, I was a fraud executive with one of the largest U.S. banks. I had found MRC to be a good event for networking and gaining a better understanding of the fraud-related concerns of the bank’s commercial clients.

This was my first experience attending MRC as an industry research analyst. I cover fraud and data security issues for Aite Group; most of my coverage is from a banking perspective, but I wanted to learn more about the challenges merchants are facing in today’s environment. I also wanted to understand how merchants’ fraud and risk challenges compare with those experienced by financial institutions.

Real-time payments have existed in some other countries for several years, and they are now a reality in the United States. Many financial institutions (FIs) are offering their customers the ability to send money in real time to family and friends quickly and easily and, in many cases, without a charge. New payment types are evolving—business-to-business payments as well as person-to-business payments, business-to-person (B2P) payments, and person-to-person (P2P) payments are becoming mainstream.

Additional FIs are actively evaluating the market demand and deciding whether to offer real-time payments to their customers.

Once an afterthought, customer experience is now a focal point for not only banks but also their business and corporate customers. Customers consider it when selecting new bank partners and have higher expectations for it than ever before. Gone are the days when banks could use sophisticated functionality as an excuse for clunky, outdated systems and manual processes. Today’s customers—from consumers to corporate treasurers—are tech-savvy and in a hurry, and they expect the same type of experience whether they are on Amazon.com or their bank’s portal. As a result, when we ask commercial banks about their preferences when it comes to technology enhancements, just as many banks prefer a focus on usability as they do on functionality.

In recent years, several SWIFT member banks have been targeted by cyber fraudsters, resulting in accumulated thefts of many millions of dollars. Impacted banks in several different countries have been victimized, demonstrating that there are no borders when it comes to cybercrime and that any company can be targeted.

Interestingly, SWIFT has been in the headlines broadcasting each of these incidents, although the SWIFT network itself has not been compromised. The thefts have been successful due to security gaps in member financial institutions that were exploited. SWIFT’s response has been very proactive, but the reputational damage SWIFT has incurred (resulting from member security gaps) has been severe and undeserved.

Clean shares are popping up in the U.S. Several firms, including Capital Group, Janus Henderson Investors, MFS, and T. Rowe Price, offer them. The shares came about from a Securities and Exchange Committee no-action letter issued on January 11, 2017, responding to Capital Group’s request for interpretative guidance on Section 22(d) of the Investment Company Act of 1940.